FILED: QUEENS COUNTY CLERK 05/26/2016 03:27 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 706267/2016
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`RECEIVED NYSCEF: 05/26/2016
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`NYSCEF DOC. NO. 1
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`INDEX NO. 706267/2016
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`RECEIVED NYSCEF: 05/26/2016
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`1 of 10
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`SUPREME COURT OF THE STATE OF NEW YORK
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`COUNTY OF QUEENS
`--------------------------------------------------------------------X
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`Index No.
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`Date Purchased: May 26, 2016
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`CENTENNIAL ELEVATOR INDUSTRIES INC.,
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`GUS CATANZARO, ERIC L’ESPERANCE and
`RICHARD L’ESPERANCE,
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`-against—
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`Plaintiffs,
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`RICHARD T. L’ESPERANCE,
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`__________________________________________________________________“X
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`Defendant.
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`VERIFIED COMPLAINT
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`Plaintiffs, Centennial Elevator Industries Inc. (hereinafter referred to as “Centennial”)
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`Gus Cantanzaro, Eric L’Esperance and Richard L’Esperance, by their undersigned counsel, as
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`and for their Verified Complaint against Defendant Richard T. L’Esperance hereby allege as
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`follows upon information and belief:
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`Nature of the Action
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`1.
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`This is an action brought is Plaintiff Centennial and its shareholders against
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`fellow shareholder and former employee Richard T. L’Esperance, seeking injunctive relief and
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`declaratory relief regarding the parties’ rights and obligations under a Shareholders’ Agreement
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`dated January 1, 2006. By this action, plaintiffs seek to restrain defendant from carrying through
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`on his threat to misuse provisions of the Shareholders’ Agreement, which are unenforceable as a
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`matter of law, to force a dissolution of Centennial which will put hundreds of employees out of
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`work.
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`2.
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`There is already pending in this Court a related action brought by Centennial
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`against this defendant Centennial Elevators Industries Inc. et al v. Richard T. L’Esperance et
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`al.
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`(Queens Sup.) index no.705900/2016, for claims arising out of his misappropriation and
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`conversion of Centennial’s books and records, including confidential business information and
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`trade secrets, egregious breaches of fiduciary duty, diversion, misappropriation, conversion, and
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`unfair competition.
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`2.
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`By this action, all the shareholders of Centennial — other than defendant — have
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`joined to ask this Court to save their company and hundreds of jobs, by declaring the agreement
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`provisions relied on by defendant to be unenforceable as a matter of law, and by enjoining
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`defendant from seeking to enforce such provisions.
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`The Parties
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`6.
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`Plaintiff Centennial is and at all times was a duly organized and existing New
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`York State corporation doing business in the State and City of New York, County of Queens.
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`7.
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`Plaintiff Richard L’Esperance is and at all relevant times was a resident of the
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`State of New York, County of Nassau, and is the President, a Director and the majority
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`shareholder of Centennial.
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`8.
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`Plaintiff Eric L’Esperance is and at all relevant times was a resident of the State
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`of New York, County of Nassau, and a shareholder of Centennial.
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`9.
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`Plaintiff Gus Catanzaro is and at all relevant times was a resident of the State of
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`New York, County of Suffolk, and is a shareholder of Centennial.
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`lO.
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`Defendant Richard T. L’Esperance at all relevant times was and is a resident of
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`the State of New York, County of Nassau and claims to be a 20% shareholder in Centennial
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`although he never received share certificates evidencing such ownership.
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`Jurisdiction
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`ll.
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`Jurisdiction is proper in this Court as all contract which is the subject of this
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`controversy was entered into in the State of New York, by residents of this State, and this action
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`involves residents of this State.
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`Venue
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`12.
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`Venue is properly placed in the County of Queens pursuant to CPLR 503 as
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`Centennial maintains its principal place of business in this County.
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`Factual Background
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`13.
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`Defendant Richard T. L’Esperance is the abusive, disloyal eldest son of Plaintiff
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`L’Esperance.
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`14.
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`He is an individual who not only disgracefully abused his own father while under
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`his father’s employ, but also regularly spewed profanity and even threatened to kill him, and then
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`quit in anger and stole trade secrets, proprietary and confidential information and enlisted Sena
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`(a valued Centennial employee) in order to run a competing business in order to steal Centennial
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`customers. His stated rationale for this abhorrent conduct was that his father had made the other
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`son (defendant’s younger brother Eric) an equal owner in Centennial.
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`15.
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`Although Defendant Richard T. L’Esperance actually still made 100% more
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`money than his brother Eric (raking in $2 million annually in salary and bonuses, compared to
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`Eric’s $1 Million),
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`this arrangement somehow was simply unacceptable to Richard T.
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`L’Esperance.
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`14.
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`As part of his plan to destroy both the company and his father, as he expressly
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`threatened to do, defendant sent plaintiffs a May 19, 2016 demand that they dissolve the
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`company, which would leave hundreds unemployed.
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`15.
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`Plaintiffs now seek judicial relief to restrain this Defendant from following
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`through on this threat as it is based on a Shareholders’ Agreement unenforceable because of
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`(a) defendant’s unclean hands, breach of fiduciary duty and repudiation in actively
`competing against the company while still a shareholder in clear violation of both his
`common law duties and his obligations under the express terms of the agreement;
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`(b) the unenforceability of the Buy/Sell provisions of the agreement under both common
`law and NY BCL 501 (c); and
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`(c) the absence of any transfer of unconditional ownership of the stock at issue to
`defendant.
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`16.
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`Centennial is a highly successful elevator company formed in January 1976,
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`specializing in modernization projects, maintenance and repair and inspection throughout the
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`City of New York. From a base of operations in Astoria, Queens the company has grown to a
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`staff of hundreds of highly qualified and trained technicians and is amongst the leaders in the
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`industry in their area.
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`17.
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`Defendant Richard T. L’Esperance joined his father and became a minority owner
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`in the business in 1997. Although he was paid many millions of dollars in salary including
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`enormous bonuses (some of which were not authorized), this Defendant grew unhappy when his
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`father voiced his intention to give his other son Eric an equal minority interest in the business
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`(with lesser bonuses, so that Richard T. L’Esperance made “only” $2 million in a single year,
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`while his younger brother made $1 million).
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`18.
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`By letter dated May 19, 2016, as part of his plan to destroy Centennial defendant
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`has asserted incorrectly that pursuant to the Buy/Sell provisions of the Agreement, he now is
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`entitled to have Centennial dissolved.
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`19.
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`Plaintiff Eric L'Esperanee is a shareholder of Centennial and never signed or
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`agreed to the provisions of the Buy/Sell agreement.
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`20.
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`Defendant has unclean hands, has breached his fiduciary duty to plaintiffs and has
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`repudiated the agreement and its express requirements, by actively and coverting competing
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`against the company while still a shareholder.
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`21.
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`Defendant’s ongoing misconduct is in clear Violation of both his common law
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`duties and his obligations under the express terms of the agreement.
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`20.
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`Defendant in demanding dissolution incorrectly has claimed absolute ownership
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`of shares in Centennial
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`- which the company and plaintiffs challenge —
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`for shares only
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`conditionally given to him that are not even subject to the Agreement at issue.
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`21.
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`Centennial and all of its other shareholders - all of whom are plaintiffs herein —
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`have asserted that the provisions relied upon by defendant are unenforceable as a matter of law.
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`22.
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`The Buy/Sell provisions of the agreement
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`relied upon by defendant are
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`unenforceable as an unreasonable restriction on the alienability of stock in Centennial.
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`23.
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`The Buy/Sell provisions of the agreement
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`relied upon by defendant are
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`unenforceable under NY BCL 501 (c) as they discriminate between owners of the same class of
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`stock in Centennial.
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`24.
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`Centennial and all of its other shareholders - all of whom are plaintiffs herein -
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`have asserted that shares at issue are not subject to the provisions relied upon by defendant.
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`25.
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`The Agreement at issue expressly provides that any party may move the Court for
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`injunctive relief.
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`26.
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`By this action, Centennial and its plaintiff shareholders seek injunctive relief in
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`the form of declaratory relief that the provisions relied upon by defendant
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`in demanding
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`dissolution are unenforceable, that shares at issue are not subject to the provisions relied upon by
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`defendant and that by his unclean hands defendant cannot enforce the Agreement as a club to
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`dissolve Centennial.
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`27.
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`By reason of the foregoing, an actual and justiciable controversy exists between
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`the plaintiffs and defendant as to the enforceability of the Buy/Sell provisions of the Agreement.
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`FIRST CAUSE OF ACTION
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`(For Declaratory Relief)
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`28.
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`Plaintiffs repeat and reallege with full force and effect each and every allegation
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`set forth above, and further allege as follows:
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`29.
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`By reason of the foregoing, an actual and justiciable controversy exists between
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`the plaintiffs and defendant as to the enforceability of the Buy/Sell provisions of the Agreement.
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`30.
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`By this action, Centennial and its plaintiff shareholders are entitled to a
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`declaratory judgment that the provisions relied upon by defendant in demanding dissolution are
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`unenforceable, that shares at issue are not subject to the provisions relied upon by defendant and
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`that by his unclean hands defendant cannot enforce the Agreement as a club to dissolve
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`Centennial.
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`SECOND CAUSE OF ACTION
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`(Injunctive Relief)
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`31.
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`Plaintiffs repeat, reiterate and reallege the allegations contained in paragraphs “1”
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`through “27” of the Verified Complaint herein, with the same force and effect as though the
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`same were fully set forth herein.
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`32.
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`Unless Defendant
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`is enjoined and restrained from enforcing the illegal and
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`inapplicable Buy/Sell provisions of the agreement which defendant has breached, plaintiffs will
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`be irreparany harmed.
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`33.
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`By reason of the foregoing, Plaintiff Centennial and its shareholders are entitled
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`to a permanent injunction, enjoining Defendant, and all persons and/or entities acting on his
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`behalf for their benefit or in active concert or active participation with them; directing and
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`enjoining:
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`from, directly or indirectly enforcing the Buy/Sell provisions of the agreement.
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`WHEREFORE, Plaintiffs respectfully request judgment against Defendant as follows:
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`(a) on the First Cause of Action, a declaratory judgment that the provisions
`relied upon by defendant in demanding dissolution are unenforceable, that
`shares at issue are not subject to the provisions relied upon by defendant
`and that by his unclean hands defendant cannot enforce the Agreement as
`a club to dissolve Centennial; and
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`injunction, enjoining
`(b) on the Second Cause of Action, a permanent
`Defendant, and all persons and/0r entities acting on his behalf for their
`benefit or in active concert or active participation with them; directing and
`enjoining:
`from, directly or indirectly enforcing the Buy/Sell provisions
`of the agreement; and
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`including without
`this Court deems just
`(c) such additional relief that
`limitation, interest, the costs and counsel fees incurred herein.
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`Dated: New York, New York
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`May 26, 2016
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`By: W
`Jacques Catafago, Esq.
`CATAFAGO FINI LLP
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`The Empire State Building
`350 Fifth Avenue, Suite 7412
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`New York, NY 10118
`212—239—9669
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`$§§§§E§§§
`Counselfor plaintifls
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`VERIFICATION
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`STATE OF NEW YORK)
`COUNTY OF NEW YORK; SS.
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`JACQUES CATAFAGO, being duly sworn, deposes and says:
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`I am counsel for the Plaintiffs in this action.
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`I have read the foregoing Complaint and
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`know the contents thereof to my own knowledge to be true, except as to the matters therein alleged upon
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`information and belief, and, as to those matters, I believe them to be true, based on observations,
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`conversations and documents I have had and reviewed an d research I have conducted. The reason this
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`Verification is made by me is because my clients in the county where I maintain my office.
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` JACQUE
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`otary Public
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`KENNETH T. WASSERMAN
`Notary Public, State of New York
`No. 02WA4642982
`Qualified in New York County
`Commission Expires November 30, 20
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